Accumulated experience

, 51, 115–117

Acquisition

, 46, 60, 123

experience

, 115, 117, 126, 130, 140, 143

of external legitimacy

, 69, 70

and greenfield experience

, 115, 117

ID–acquisition experience

, 141–142

interaction effects

, 143

pros and cons of establishment modes

, 61

Aggregate measure of ID

, 88

key independent variables

, 91

results for Swiss OFDI determinants

, 89–90

Wald test

, 92

Akaike’s information criterion (AIC)

, 138, 145–146, 151

Average marginal effects

, 129–130

for establishment choice

, 133–144

interrelated choice of establishment and ownership

, 154–156

for ownership choice

, 144–156

Bivariate probit model

, 154–155

Business network(s)

, 52, 53

embeddedness

, 53, 54, 69–70, 140, 145, 155

ID–network embeddedness

, 143

Swiss firms

, 118–119

Business relationships

, 52, 53, 54, 70

Cluster

, 55–57

analysis

, 18, 21–22

dendrograms

, 8, 21, 22, 30, 36

Cluster embeddedness

, 56, 70–71, 119–122

ID–cluster embeddedness, interaction effects on probability of greenfield

, 143–144, 146

ID–cluster embeddedness, interaction effects on probability of partial ownership

, 154, 156

Cognitive pillar

, 2–3

Composite measure

, 8, 12–15, 77

Conceptualization

of ID

, 2

institutional aspects

, 5–6

and measurement of ID

, 160

notion of perception

, 4–5

Scott’s conceptualization of institutions

, 2

types of

, 3–4

Control of corruption (CC)

, 7, 10, 11, 27, 30–31

Control variables

, 85, 91, 97–98, 131

firm’s characteristics

, 132–133

firm’s motives

, 131–132

macroeconomic environment

, 86–87

trade and geographical distance

, 86

Corporate culture

, 4

Corporate nationality

, 43

Country-level analysis

, 76

with aggregate measure of ID, results for models

, 88–92

correlation matrix of variables

, 166

discussion of results

, 100–103

empirical models and methodology

, 76–80

with individual dimensions of informal ID, results for models

, 92–98

results

, 87–88

results for Swiss OFDI determinants

, 167–175

sensitivity analysis

, 98–100

variables

, 80–87

see also Firm-level analysis

Cronbach’s alpha

, 12, 15

Cultural, administrative, geographic, economic (CAGE)

, 1, 4

Cumulative variation

, 13

Data

, 8, 87

for bilateral FDI stocks

, 80–81

country-level data

, 76

formal ID

, 10–11

informal ID

, 8–10

informal institutional

, 46

SNB data

, 108

Demand-related network

, 118–119

Dependent variable(s)

, 80, 130

descriptive statistics of Swiss OFDI stocks

, 82–83

percent share of Swiss OFDI stocks, by world region

, 84

percent share of Swiss OFDI stocks, manufacturing, and services

, 84

standard descriptive statistics

, 81

Descriptive analysis

, 107, 156

statistics on firm’s largest FDI

, 110–125

trends over period (2010–2014)

, 107–110

see also Econometric analysis

Descriptive statistical analysis

, 9

of formal ID measures

, 26–28

of informal ID measures

, 19–20

Discrimination hazards

, 46–47

Diversification

, 132

Domestic density

, 43, 44

Dummy variable

, 131

Early Starter

, 54

Econometric analysis

, 125

empirical models

, 125–130

results

, 133–156

variables

, 130–133

see also Descriptive analysis

Econometric methods

, 76, 129–130

Efficiency-seeking FDI

, 85

Empirical models

, 125

description of variables

, 78–79

econometric methods

, 129–130

establishment choice

, 125–129

geographic distance

, 77

linear unobserved effects panel data models

, 80

and methodology

, 76

ownership choice

, 129

variables for establishment and ownership determinants

, 126–128

Entry mode

preference

, 122–125

strategies

, 59–60

Entry mode choice

entry mode strategies

, 59–60

factors reducing impact of ID

, 66–71

and firms entry mode strategies

, 61–66

institutional distance on

, 58

Equity modes

, 59–60

Establishment-specific experience

, 68, 69, 115

“Establishment chain”

, 50–51

Establishment choice (Est)

, 125–129, 130

average marginal effects for

, 133–140

formal ID and

, 63–64

informal ID and

, 62–63

institutional distance and

, 62

interaction effects on probability of greenfield

, 140–146

interrelation with ownership choice

, 154–156

Establishment determinants, variables for

, 126–128

Establishment mode

, 61, 125

Euclidean distance (ED)

, 12, 20, 28, 99

Expansion

, 114, 132, 134, 147, 179, 183, 186

liability of inter-regional

, 86

liability of intra-regional

, 86

Experience

accumulated

, 115–117

acquisition

, 115, 117, 126, 130, 140, 143

through creation

, 49

establishment-specific

, 68, 69, 115

firms and

, 51–52

formal ID-international

, 155

greenfield

, 115, 117, 130, 140

host country-specific

, 67–69, 115, 142, 154, 157

ID–acquisition

, 141–142

ID–greenfield

, 142–143

ID–host country-specific

, 140–141, 152–153

ID–international

, 140

international

, 67, 115, 115, 126, 152, 153, 157, 161

learning in firms

, 51

of MNEs

, 49

types

, 67–69, 130–131

External pressure

, 45

Factor analysis (FA)

, 7, 12–15

“Factor loadings” coefficients

, 14

Factor scores variables

, 14–15

FE model

, 88

Finland

Global Competitiveness Index ranking

, 158

informal ID

, 24

Firm-level analysis

correlation matrix of variables

, 178

descriptive analysis

, 107–125

econometric analysis

, 125–156

establishment choice of Swiss firms, results for determinants of

, 179–182

interrelated choice of Swiss firms, results for determinants of

, 186–188

KOF survey

, 106

ownership choice of Swiss firms, results for determinants of

, 183–185

results

, 156–158

Swiss Entry Mode Choice, results for

, 157

Swiss firms

, 105

see also Country-level analysis

Firm(s)

characteristics

, 132–133

classification

, 106

Early Starter

, 54

entry mode strategies, institutional distance and

, 61–66

features

, 108

firm-level database

, 125

International among Others

, 54–55

with international experience

, 140

Late Starter

, 54

Lonely International

, 54

motives

, 131–132

motives for FDI

, 85

from resource-based view

, 53

Foreign direct investment (FDI)

, 39, 40, 56, 75, 110

Foreignness

, 42–44

see also Liability of foreignness (LOF)

Formal ID

, 7, 10–11, 25, 88, 130, 138, 139, 151

cluster dendrograms

, 30–34

clustering method

, 29–30

descriptive statistics

, 26–28

and establishment choice

, 63–64

formal ID-international experience

, 155

formal ID-network

, 155

ID measures

, 28–29

maps between Switzerland and host countries

, 35–36

and ownership choice

, 66

PCA/FA results for creation

, 26

Swiss case

, 28–36

WGI

, 25–26

see also Informal ID

Formal institutions

, 3

France

Hofstede’s scores

, 24

informal ID

, 22, 24, 36–37

GDP

, 76, 77, 87, 102

of home and host countries

, 98–100

per capita

, 158

Generalized least squares (GLS)

, 80, 88

Geographic distance

, 77, 79, 86, 87, 97, 99, 101–103

“Geovalent” filter

, 68

Germany

domestic density index

, 44

FDI projects

, 107, 108, 111, 112

formal ID

, 26

Hofstede’s scores

, 24

Global competitiveness

, 85

Global Competitiveness Reports (GCR)

, 6–7, 158

Global Leadership and Organizational Behavior Effectiveness (GLOBE)

, 6

Goodness-of-fit measures

for establishment choice

, 138

for ownership choice

, 151

Governance

, 7

Government effectiveness (GE)

, 7, 10

Graphical analysis

, 24–25

Gravity model

, 77

Greenfield experience

, 115, 117, 130, 140, 142–143, 144

“Guanxi” effect

, 53

Hausman test

, 88

Hazards, unfamiliarity

, 45–46

Hierarchical clustering methods

, 18

Host country

inflation rate

, 86, 87

institutional uncertainty

, 62

level of experience at entry in

, 116–117

Host country-specific experience

, 67, 115

interaction effects on probability of greenfield

, 140–141, 142

interaction effects on probability of partial ownership

, 152–153, 154

Host country-specific experience

, 67–69, 115, 142, 154, 157

“Illusion of stability”

, 9

Indirect linkages

, 70

Indirect relations

, 56

Individualism (IDV)

, 6, 8, 80

Informal ID

, 6–7, 8–10, 18, 88, 130, 139

descriptive statistics of informal ID measures

, 19–20

and establishment choice

, 62–63

individual dimensions of

, 92–98

null hypothesis of zero-coefficients

, 97–98

and ownership choice

, 65–66

PCA/FA results for creation

, 18–19

RE model estimated by GLS

, 93

results for Swiss OFDI determinants

, 94–96

Swiss case

, 20–25

see also Formal ID

Informal institutional distance (LID _- inf)

, 88

Informal institutions

, 3

Institutional approach

, 41–42

Institutional Country Risk Guide (ICRG)

, 7

Institutional distance (ID)

, 1, 48–49, 75

aggregate measure

, 88–92

comparison of ID measures

, 17–18

conceptualization

, 2–6

data

, 8–11

on entry mode choice

, 58–71

entry mode strategies

, 59–60

factors reducing impact on entry mode choice

, 66–71

and firms’ entry mode strategies

, 61–66

foreignness

, 42–44

ID–acquisition experience

, 141–142, 143

ID–cluster embeddedness

, 143–144, 146, 154, 156

ID–greenfield experience

, 142–143, 144

ID–host country-specific experience

, 140–141, 142, 152–153, 154

ID–international experience

, 140, 152, 153

ID–network embeddedness

, 143, 145, 153, 155

institutional quality, institutional distance vs.

, 57–58

internationalization process

, 42–49

and learning process

, 49–57

legitimacy concerns

, 44–49

liability of foreignness

, 44–49

on location choice

, 42–58

measurements and comparisons

, 8

multidimensional distance

, 15–17

operationalization

, 6–7

related firm’s strategies

, 62

results

, 34–37

unidimensional distance

, 8–15

see also Formal ID; Informal ID

Institutional diversity

, 4

Institutional index

, 7

Institutional inertia

, 68

Institutional quality

, 98

institutional distance vs.

, 57–58

Institutional theory

, 45

Interaction effects on probability of greenfield

, 140

ID–acquisition experience

, 141–142, 143

ID–cluster embeddedness

, 143–144, 146

ID–greenfield experience

, 142–143, 144

ID–host country-specific experience

, 140–141, 142

ID–international experience

, 140

ID–network embeddedness

, 143, 145

Interaction effects on probability of partial ownership

, 152

ID–cluster embeddedness

, 154, 156

ID–host country-specific experience

, 152–153, 154

ID–international experience

, 152, 153

ID–network embeddedness

, 153, 155

Internal diversity

, 4

Internal institutions

, 63

Internalization advantages (I-advantages)

, 40

Internalization theory

, 40, 41

Internal pressure

, 45

International business (IB) studies

, 1, 8

International entrepreneurship approach

, 49

International experience

, 67, 115, 115, 126, 152, 153, 157, 161

Internationalization

, 48–50, 86, 101, 109

Intra-organizational relations

, 48

Investments, profitability of

, 110

K&S impact

, 99

Kaiser-Meyer-Olkin (KMO)

, 18, 26

Kaiser’s rule

, 13

Key independent variables

, 84, 88, 91

informal and formal ID

, 130

networks

, 131

types of experience

, 130–131

KOF

Institute

, 105

internationalization survey

, 130–131

questionnaire on Internationalization of Swiss firms

, 190–191

survey

, 124

Kogut and Singh distance (K&S distance)

, 15–16

Late Starter

, 54

Learning

, 42, 115

accumulated experience

, 115

cluster embeddedness

, 119–122

importance of motivations to invest in cluster

, 121

importance of presence of firms in field on location choice

, 121–122

institutional distance and

, 49

level of experience at entry in host country

, 116–117

network approach

, 52–57

network embeddedness

, 117

stage approach

, 50–52

types of business relations

, 119

Legal corporate nationality

, 43

Legitimacy

, 44

discrimination hazards

, 46

hazards, unfamiliarity

, 45–46

ID

, 48–49

internationalization

, 48–49

relational hazards

, 47–48

Liability of foreignness (LOF)

, 42, 44, 48–49, 51, 109

Liability of outsidership

, 47

LID _– qual

, 91

Location-specific advantages (L-advantages)

, 40

Location choice

, 113

importance of presence of firms in field on

, 121–122

institutional distance on

, 42, 44–49

institutional quality, institutional distance vs.

, 57–58

internationalization process

, 42–49

and learning process

, 49–57

legitimacy

, 44–49

LOF

, 44–49

Location preference

, 111–113

Lonely International

, 54

Macroeconomic environment

, 86–87

Macro institutions

, 4

Mahalanobis distance (MD)

, 16–17, 98

Manufacturing sample

, 99

Market-seeking FDI

, 85

Market-seeking motive

, 86, 100

“Masculine” society

, 24, 103

Masculinity (MAS)

, 6, 8, 24, 80

Maximum likelihood estimator (MLE)

, 80, 88

Meso institutions

, 4

Micro institutions

, 4

Model specification

, 1, 87, 133

average marginal effects for establishment choice

, 133–138

average marginal effects for ownership choice

, 144–145

results for models with aggregate measure of ID

, 88–91

results for models with individual dimensions of informal ID

, 93

Model specification

, 2, 133

average marginal effects for establishment choice

, 138–139

average marginal effects for ownership choice

, 145–146

results for models with aggregate measure of ID

, 91–92

results for models with individual dimensions of informal ID

, 93–97

Model specification

, 3, 133

average marginal effects for establishment choice

, 139–140

average marginal effects for ownership choice

, 146–152

results for models with aggregate measure of ID

, 92

results for models with individual dimensions of informal ID

, 97–98

Most multinational enterprises (MNEs)

, 76, 86

with technological knowledge

, 132

Motivations

, 113–115

importance to invest in cluster

, 121

variables impact

, 155

Multidimensional distance

, 15–17

K&S distance

, 15–16

Mahalanobis distance

, 16–17

normalized Euclidean distance

, 17

see also Unidimensional distance

Multihome-countries

, 75

Multihost-countries

, 75, 76

Multinational diversity

, 67

Multinational enterprises (MNEs)

, 42

Multivariate statistical techniques

FA

, 12–15

PCA

, 12–15

National business systems

, 5

National culture

, 8

dimensions of

, 6

National governance systems

, 5

National innovation systems

, 5

Nationality of firm

, 43

Natural resource-seeking FDI

, 85

Nepal, FDI in

, 112–113

Network(s)

, 131

business network embeddedness

, 69–70

cluster embeddedness

, 70–71

embeddedness

, 117, 143, 145, 153, 155

Network approach

, 49, 52–57

of internationalization

, 55

Normal distribution

, 81

Normalized Euclidean distance

, 17

Normative elements

, 2

OFDI stocks from manufacturing (OFDI–man)

, 81

OFDI stocks from services (OFDI–serv)

, 81

OLI framework

, 41, 113

“Open Door” policy

, 113

Operationalization of ID

, 6–7

Ownership

, 58–60

Ownership-specific advantages (O-advantages)

, 40

Ownership choice (Own)

, 129, 130

institutional distance and

, 64–66

interrelation with establishment choice

, 154–156

Ownership determinants

, 60

variables for

, 126–128

Panel database of FDI

, 75–76

Pearson correlation matrix

, 87

Political stability and absence of violence (PS)

, 7, 10

Pooled ordinary least squares (POLS)

, 88

Power distance (PDI)

, 6, 8, 80, 103

Principal component analysis (PCA)

, 7, 12–15, 99

Product life-cycle theory

, 40

Psychic distance

, 51

Random effect

, 80

Random variable

, 80

Regression method

, 14–15

Regressors

, 87

Regulatory dimension

, 2

Regulatory quality (RQ)

, 7, 10

Relational hazards

, 47–48

RE model

, 88

Response rate

, 106

Rule of law (RL)

, 7, 10

Schwarz’s Bayesian information criterion (BIC)

, 138, 146, 151

Sensitivity analysis

, 76, 98–100

Small and medium enterprises (SMEs)

, 42, 114

Stage approach

, 49–52

Standard deviation (sd)

, 9, 20

Statistical dimensions

, 12

Statistics on firm’s largest FDI

, 110

entry date of firm’s largest investment

, 111

entry mode preference

, 122–125

learning process

, 115–122

location preference

, 111–113

motivations

, 113–115

time preference

, 111

Strategic assets-seeking FDI

, 85

Supply-related network

, 118–119

Swiss case

formal ID measures

, 28–34

informal ID measures

, 20–25

Swiss FDI

, 73, 157–158

determinants

, 160

location choice

, 76

location choice

, 76, 161

projects

, 107

stocks

, 77, 108

Swiss firms

, 113

foreign investments of

, 105–106

KOF questionnaire on Internationalization of

, 190–191

results for determinants of establishment choice

, 179–182

results for determinants of interrelated choice

, 186–188

results for determinants of ownership choice

, 183–185

Swiss market

, 43

Swiss National Bank

, 80, 108

Swiss OFDI

distribution

, 81

gaps

, 160

geographical distance

, 101

location choice

, 76, 93

in services

, 92

stocks

, 37, 81, 82, 84

Swiss OFDI determinants

manufacturing sample

, 170–172

services sample

, 173–175

total sample

, 167–169

Switzerland

domestic density index

, 44

FDI

, 159

formal ID

, 29–30, 33, 35, 37, 84, 160

Global Competitiveness Index ranking

, 158

Hofstede’s scores

, 23–24

informal ID

, 18, 20, 22, 24–25, 36, 84, 160

institutional quality

, 76, 88, 91

PDI

, 103

Theoretical foundations

entry mode choice, institutional distance on

, 58–71

institutional approach

, 41–42

location choice, institutional distance on

, 42–58

OLI framework

, 41

product life-cycle theory

, 40

theoretical hypotheses

, 71–73

traditional IB theories

, 39

Time-constant variable

, 80

Time preference

, 111

Total sample (OFDI–tot)

, 81, 98–99

Trade distance

, 86

Trade flows

, 76

Transaction cost theory

, 40, 41, 46

Uncertainty avoidance (UAI)

, 6, 8, 80

Unidimensional distance

based on composite measurement creation

, 12–15

Euclidean distance

, 7, 8

see also Multidimensional distance

Unobserved effect

, 80

Variables

control variables

, 85–87, 131–133

corporate-level analysis

, 80

dependent variables

, 80–84, 130

firm-level analysis

, 130

key independent variables

, 130–131

key independent variables

, 84

results

, 87

Variance inflation factor (VIF)

, 87

Varimax

, 14

Voice and accountability (VA)

, 7, 10

Volatility

, 87

Wald test

, 91

World Competitiveness Yearbooks (WCY)

, 6

Worldwide Governance Indicators (WGI)

, 7